Informal Sector

In News:

According to the latest data,

• Over 94 percent of 27.69 crore informal sector workers registered on the e-Shram portal suggesting vital data for the policymakers in the country.
  • This unorganised portal registered workforce is living under extreme poverty and a majority of them belong to socially backward communities.

Data analysis:

• Income-wise analysis:
  • The data showed that 94.11 percent of the registered informal workers have a monthly income of Rs 10,000 or below.
  • 4.36 percent have a monthly income between Rs 10,001 and Rs 15,000.

• The social category analysis:
  • 74.44 percent of registered workers are below the socially backward classes, including 45.32 percent OBC, 20.95 percent SC and 8.17 percent ST. 
  • The proportion of the General Category workers is 25.56 percent.
• Age-wise analysis: 
  • 61.72 percent of the registered workers on the portal are of the age from 18 years to 40 years, while 22.12 percent are the aged from 40 years to 50 years.
  • The proportion of the registered workers aged above 50 years is 13.23 percent, while 2.93 percent of workers are aged between 16 and 18 years.
• Gender analysis 
  • 52.81 percent of registered workers are female and 47.19 percent are male.
• State-wise analysis
  • Top-5 states in terms of registrations are Uttar Pradesh, Bihar, West Bengal, Madhya Pradesh and Odisha.
• Occupation wise 
  • Agriculture is at the top with 52.11 percent of enrolments done by those related to the farm sector followed by domestic and household workers at 9.93 percent and construction workers at 9.13 percent.

What is an Unorganised /Informal sector?

• It is characterised by small and scattered units which are largely outside the control of the government. 
• There are rules and regulations but these are not followed. Jobs here are low-paid and often not regular. 
• There is no provision for overtime, paid leave, holidays, leave due to sickness, etc. Employment is not secure. 
• People can be asked to leave without any reason. 
• This sector includes a large number of people who are employed on their own doing small jobs such as selling on the street or doing repair work.
• Similarly, farmers work on their own and hire labourers as and when they require

Unorganised/Informal sector in India 

• Around 80% of India’s labour force is employed in the informal sector and the remaining 20% in the formal sector. 
• Of the 80% informal sector workforce, half work in agriculture and the remaining in non-agricultural sectors.

Challenges /Issues Faced by them 

• Lack of Social security benefits
• Susceptibility to economic shocks
• Structural disadvantage: The structural disadvantage in terms of literacy and skills make them more prone to exploitation. 
• Government failure: There is a government failure to reduce wage inequality and ensure a bare minimum wage to a large chunk of the urban informal workers during normal times.
• Implications of Lockdown: Informal sector workers suffered far more from the national lockdown in 2020 than their formal sector counterparts.

Government’s Initiatives 

• Unorganised Workers’ Social Security Act, 2008: 
  • The Act empowers the Central Government to provide Social Security benefits to unorganised sector workers by formulating suitable welfare schemes
• Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY):  Life and disability cover is provided through Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY). 
• Pradhan Mantri Shram Yogi Maan-DhanYojana (PM-SYM) and National Pension Scheme for Traders, Shopkeeper and Self-Employed Persons (NPS- Traders).
• MGNREGA 
• Pradhan Mantri Garib Kalyan Yojana / Package 
  • In 2020, the Government of India had announced the “Pradhan Mantri Garib Kalyan Anna Yojana” (PM-GKAY) for all beneficiaries covered under the National Food Security Act, 2013 (NFSA).

Way forward:

• There is a need to give protection to informal sector workers via social welfare schemes so that the disruption they are facing does not lead to a permanent fall in demand. 
• Agriculture cannot absorb more people. It is already overcrowded. Engaging migrants in building new agri-value chains has some potential to create productive employment and protect livelihoods.
• In the meantime, the government can scale up its “one nation, one ration card” scheme, and make subsidised grains available at places of work in cities and industrial towns.
• Along with this, financial assistance under the Garib Kalyan Yojana can also be extended to the unorganised sector.

Source: ET